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Bank of Queensland (BoQ) has called for more transparency in how lenders sell their products directly to consumers.
The bank’s submission to the Senate economics committee overseeing the streamlining of the Future of Financial Advice measures said the current compliance system is “complex and costly” and a deterrent to Australians seeking advice.
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BoQ recommended that product sales advice should only be given by employees who are not eligible for volume-based payments.
The bank also recommended that lenders provide customers with brief summaries that explain which type of advice they are offering and which products they are recommending.
The summaries would also “explicitly” disclose all fees and advise the customer to seek independent financial advice during the 14-day cooling off period.
Bank of Queensland’s submission also called for the definition of financial advice to be widened to include advice on the purchase of real estate, except in the case of owner-occupiers.
“Real estate purchases by consumers represent significant investments of wealth and almost always involve some element of debt,” the bank said.
“It is an anomaly that advice provided on such significant investment decisions is not regulated in the same way as advice on similarly significant investments, for example superannuation, managed funds, margin lending.”
